Volume 32
Issue 1
Annual Survey of Texas Law
Article 11
1978
Workers' Compensation
Thomas P. Sartwelle
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Recommended Citation
by
Thomas P. Sartwelle*
T
HE title of this year's Article provides a distinctive clue to the wideranging changes taking place in the field of compensation law.
Al-though the legislature has decreed that the Compensation Act' shall hence-forth be called by a new name,2 this new name cannot veil the old problems nor quiet the debate surrounding possible federal compensation of injured workpersons.3 Continuing threats of pre-emptive federal legislation have not only generated rapid legislative and judicial changes but also increased the controversy and debate surrounding this country's oldest form of social
insurance. This Article discusses the status of federal pre-emptive
legisla-tion as well as recent legislative enactments and judicial interpretalegisla-tions which occurred during this last survey year.
I. FEDERAL LEGISLATION
The extensive revisions of the Texas Compensation Act in 1971,4 19735
and 19756 are directly traceable to a desire by the United States Congress to pre-empt state compensation programs .7 The federal attempt to replace state control of the compensation process with a system of national workers' compensation has been spurred by the report of the National Commission on State Workmen's Compensation Laws8 as well as increasing criticism from labor and some industry spokesmen.9 The reasons for the growing concern are economic, in terms of both premiums received and benefits paid:
* B.B.A., LL.B., The University of Texas. Attorney at Law, Houston, Texas. 1. TEX. REV. CIv. STAT. ANN. arts. 8306, 8307, 8309 (Vernon 1967 & Supp. 1978). 2. The name has been changed from Workmen's Compensation to Workers' Compensa-tion. TEX. REV. CIv. STAT. ANN. art. 8306, § I (Vernon Supp. 1978).
3. The author respectfully requests the reader's permission to refer to workpersons, both male and female, as workmen throughout the remainder of the article. While this may well be inappropriate in view of the increasing number of women in the labor force, it is simply easier to write and read the more familiar "workmen" than the stilted, stiff "workperson."
4. See TEX. REV. CIv. STAT. ANN. arts. 8306, 8307, 8309 (Vernon Supp. 1978). 5. Id. These amendments as well as the 1971 amendments are noted and discussed in
Sartwelle, Workmen's Compensation, Annual Survey of Texas Law, 29 Sw. L.J. 183 (1975).
6. See TEX. REV. CIv. STAT. ANN. arts. 8306, 8307, 8309 (Vernon Supp. 1978). The 1975
amendments are noted and discussed in Sartwelle, Workmen's Compensation, Annual Survey
of Texas Law, 30 Sw. L.J. 213 (1976).
7. The history of federal workers' compensation bills in Congress is noted in Sartwelle,
Workmen's Compensation, Annual Survey of Texas Law, 31 Sw. L.J. 259 (1977).
8. NATIONAL COMMISSION ON STATE WORKMEN'S COMPENSATION LAW, THE REPORT OF THE NATIONAL COMMISSION ON STATE WORKMEN'S COMPENSATION LAWS (July 1972). The Commission was created by Congress in 1970. 29 U.S.C. § 676 (1970).
9. See Odlin, The Workers' Compensation Controversy: A Status Report, 5 JOB SAFETY
The social security administration reports that compensation payments for job-related injuries in 1975, the latest year for which complete figures are available, totaled $6.5 billion, including $1.4 billion paid by the federal government. The latter payment included $957 million paid to sufferers of pneumoconiosis (black lung) ...
The American Mutual Insurance Alliance (AMIA) estimates that the cost of workers' compensation insurance grew to $8 billion in 1976. Benefits between 1972 and 1976, the Alliance estimates, increased 125 percent, while premiums grew by 100 percent.'0
Despite the tremendous cost to employers, a cost which is passed on to the consuming public, there is mounting criticism that compensation pay-ments do not keep pace with the cost of living and are not uniform in benefits, enforcement, or administration from state to state.1 Although federal legislation has not yet been passed by Congress, it may only be a matter of time. Since 1973 bills calling for a national compensation act have been introduced at every session of Congress.12 Legislation calling for a national workers' compensation act has again been filed in 1977.13 Moreov-er, in addition to the study by the National Commission on State Workmen's Compensation Laws there have been no less than five other lengthy studies of the compensation system since 1970: two by United States Senate sub-committees; one by a House sub-committee; and two in the federal execu-tive branch.'4 The most recent report was issued in January 1977 by the policy group of the inter-departmental workers' compensation task force.'5 The task force recommended that the states be given more time to strengthen and upgrade their compensation programs before establishing a federal minimum standard or other reform measures.16
While it is perfectly evident that state compensation programs need to be revised and updated, it is also evident that improvements have been made in these programs since the National Commission's report. 17 Numerous groups
10. Id. at 17. Estimates for 1974 indicate that employers, insured or self-insured, spent $7.8 billion to insure their work injury risks. This was estimated to be over $1 billion more than the amount spent in 1973. CHAMBER OF COMMERCE OF THE UNITED STATES, ANNUAL ANALYSIS OF
WORKERS' COMPENSATION LAWS 3 (1976 ed.). II. See Odlin, supra note 9, at 17-18.
This [nonuniform benefits] may have been more acceptable in an era when there were more marked differences in the cost of living in different geographical areas. With most goods and services now provided by companies marketing on a multiterritorial basis, the prices are generally uniform. A refrigerator, a suit of clothes, or a carpet is likely to cost as much in Mississippi as it does in New York, for example.
Id. at 17.
12. S. 2008, 93d Cong., ist Sess. (1973); H.R. 8771, 93d Cong., Ist Sess. (1973); S. 2018, 94th Cong., 1st Sess. (1975); H.R. 15609, 94th Cong., lst.Sess. (1975).
13. H.R. 2058, 95th Cong., Ist Sess. (1977). For a summary of this bill see Report of the
Committee on Workmen's Compensation and Employer's Liability, 8 FORUM, Oct. 1977, at 114
(Special Issue). Forum is the official publication of the section of insurance, negligence, and compensation law of the American Bar Association.
14. Odlin, supra note 9, at 17. 15. M.
16. Id.
including the National Commission'8 itself oppose federal legislation.19 De-spite this strong opposition, deDe-spite the significant improvements in almost all state programs, despite the lesson of history teaching us that federal programs are not panaceas for all of our social ills,20 it seems likely that the federal bureaucracy, in the near future, may succeed in preempting state control of workers' compensation programs. Unless all concerned with the compensation system, individually and collectively, work to revitalize this historically sound and effective approach to industrial injuries, we may well lose control of yet another aspect of our daily lives to the amorphous
"they.' '21
II. STATUTORY AMENDMENTS
The 65th Legislature adopted twenty-three amendments affecting the Workers' Compensation Act.22 One of the first amendments passed added article 8306b, sections 1 and 2,23 and amended article 5.76 of the Insurance Code24 to simply change the name of the Act from Workmen's Compensa-tion to Workers' CompensaCompensa-tion. The remaining amendments increased both indemnity and nonindemnity benefits available under the Act, corrected procedural anomalies, and expanded government employees' benefits.
By amending article 8306, section 29(c)25 the legislature solved a complex problem involving the calculation of increases in the minimum-maximum compensation rate as related to the published annual average weekly wage of manufacturing production workers in Texas. Through the addition of the words "cumulative" and "cumulatively" in one key sentence, compensa-tion benefits are anticipated to increase as originally intended by the legisla-ture when this section was first added in 1973.26
A new section, article 8309, section 6, provides coverage for the services of doctors of podiatric medicine.27 Such services surprisingly had not been covered by the term "medical aid." 28 A podiatrist, however, is specifically excluded, unlike a chiropractor, from being appointed by the Board to
18. NATIONAL COMMISSION ON STATE WORKMEN'S COMPENSATION LAWS, supra note 8, at
126.
19. These groups include the American Bar Association, National Association of Manufac-turers, National Council of Self-Insureds, American Mutual Insurance Alliance, Compensation Section of the Association of Trial Lawyers of America, Workmen's Compensation Lawyers Association, and many others. See Millus, Is Federalization of Workmen's Compensation
Inevitable, 62 A.B.A.J. 1010 (1976), Odlin, supra note 9, at 17-21; 62 A.B.A.J. 1629 (1976).
20. Millus, supra note 19, at 1014.
21. Aside from the local versus federal issue there is the cost factor of federal control. The postal service and social security administration, to mention only two, are the classic examples of inept federal bureaucracies. One observer has been quoted as saying that a federal takeover of compensation programs could send costs up "five times as much and twice as fast." Odlin,
supra note 9, at 20.
22. All of the amendments will be noted and discussed infra except TEX. REV. CIv. STAT. ANN. art. 8309g (Vernon Supp. 1978), which was an appropriations bill authorizing $1.7 million to the attorney general for the payment of claims made under the workers' compensation program for state employees.
23. TEX. REV. CIv. STAT. ANN. art. 8306b, §§ 1, 2 (Vernon Supp. 1978). 24. TEX. INS. CODE ANN. art. 5.76 (Vernon Supp. 1978) (the assigned risk pool). 25. TEX. REV. CIv. STAT. ANN. art. 8306, § 29(c) (Vernon Supp. 1978). 26. Id.
27. Id. art. 8309, § 6.
participate in a "medical committee" examination29 or autopsy0 in a claim
for occupational disease.
Article 8306, section 7-e 3' which regulates the insurer's liability for artifi-cial appliances, prostheses, was amended to make the carrier liable for the
replacement and repair of the prostheses for the employee's life rather than merely for one satisfactory fit as under the old statute.32 This raises the
question whether an employee entitled to this lifetime benefit can compro-mise and settle his right to future repair and replacement. Since an employee may compromise and settle his right to future medical benefits,33 it would seem he could also compromise and settle his right to lifetime prosthetic
replacement or repair. Since the right to lifetime medical and lifetime artifi-cial appliances appear in two distinct and separate sections of the Act, however, it would behoove a carrier to explicitly include references to both rights when attempting to close nonindemnity future benefits.
The legislature also increased funeral benefits from $500.00 to $1,250.00.31
Funeral benefits are payable to any person who incurred the expense of the
burial.35 If there are no beneficiaries or relatives, the statute places the burden on the carrier to secure burial and cover expenses up to the max-imum $1,250.00.36
The legislature has also expanded the coverage of the Act to include not
only employees hired in Texas but Texas residents recruited in Texas as well.37 The wording change in the statute was the addition of the phrase "or, if a Texas resident, recruited in this state," 38 in the first sentence, and the
addition of the phrase, "or where the employee was recruited"39 in the
29. Id. art. 8307, § 13 (Vernon 1967). 30. Id. § 14.
31. Id. art. 8306, § 7--e (Vernon Supp. 1978).
32. Tex. Rev. Civ. Stat. Ann. art. 8306, § 7--e (Vernon 1967).
33. See, e.g., Finch v. Texas Employers' Ins. Ass'n, 535 S.W.2d 201 (Tex. Civ. App.-Texarkana 1976, writ ref'd n.r.e.); Barnes v. Bituminous Cas. Corp., 495 S.W.2d 5 (Tex. Civ. App.- Amarillo 1973, writ ref'd n.r.e.).
34. TEX. REV. CIv. STAT. ANN. art. 8306, § 9 (Vernon Supp. 1978). 35. Id.
36. Id.
37. Id. § 19. The section now provides:
If an employee, who has been hired or, if a Texas resident, recruited in this State, sustain injury in the course of his employment he shall be entitled to compensation according to the Law of this State even though such injury was received outside of the State, and that such employee, though injured out of the State of Texas, shall be entitled to the same rights and remedies as if injured within the State of Texas, except that in such cases of injury outside of Texas, the suit of either the injured employee or his beneficiaries, or of the Association, to set aside an award of the Industrial Accident Board of Texas, or to enforce it, as mentioned in article 8307, sections 5-5a, shall be brought either
a. In the county of Texas where the contract of hiring was made or where the employee was recruited; or
b. In the county of Texas where such employee or his beneficiaries or any of them reside when the suit is brought, or
c. In the county where the employee or the employer resided when the contract of hiring was made or when the employee was recruited, as the one filing such suit may elect.
Providing that such injury shall have occurred within one year from the date such injured employee leaves this State; and provided, further, that no recovery can be had by the injured employee hereunder in the event he has elected to pursue his remedy and recovers in the state where such injury occurred. 38. Id.
venue portion of the statute. These minor word changes significantly alter the existing case law on extraterritorial injury.
The phrase "who has been hired . . . in this state"40 was interpreted by
the courts as having no reference to the place where the contract of hiring was made.4' Rather, the primary question was whether the employee was hired within Texas to perform services solely within another state or within another state and Texas.42 If hired to perform work in Texas as well as another state, the claimant was a Texas employee regardless of whether he began work in the other state before working in Texas.43 If hired in Texas to
work only outside of the State of Texas during the term of the employment contract, the claimant could not claim the status of a Texas employee and was relegated to the protection of the law of the place of injury." This was true even if the employee had previously worked for the same employer in Texas and anticipated working for the same employer in the future45
be-cause a severance of the employee-employer relationship terminated the employee's status as a Texas employee.4 Payment of travel expenses from Texas to the foreign place of employment was also insufficient to bring a claimant within the extraterritorial provision of the Act.4 7
The legislature's amendment overrules a substantial portion of prior case law. The words "recruited in this state"48 should not be difficult to construe especially since they are modified and limited in application to "a Texas resident." 49 In view of the energy crisis and the recruitment of oil field and related workers to work in a variety of foreign countries and on the Alaskan pipeline, as well as numerous construction workers recruited to work in different states, this amendment should remedy a rather harsh doctrine that forced injured workmen to seek compensation in foreign jurisdictions or in some cases prevented any recourse whatsoever. It must be remembered, however, that the one year limitation50 is still applicable to every employee
whether hired or recruited in the State.
While remedying one difficulty related to foreign employment, the legisla-ture created a possible trap for unwary employers who recruit Texas resi-dents. If a non-Texas employer recruits a Texas employee to work in a foreign jurisdiction, the employee, if injured, may claim Texas
compensa-40. Id.
41. Texas Employers' Ins. Ass'n v. Dossey, 402 S.W.2d 153 (Tex. 1966); Hale v. Texas Employers' Ins. Ass'n, 150 Tex. 215, 239 S.W.2d 608 (1951); Southern Underwriters v. Gallagher, 135 Tex. 41, 136 S.W.2d 590 (1940); Renner v. Liberty Mut. Ins. Co., 516 S.W.2d 239 (Tex. Civ. App.-Waco 1974, no writ).
42. Id.
43. Texas Employers' Ins. Ass'n v. Dossey, 402 S.W.2d 153, 156 (Tex. 1966).
44. Hale v. Texas Employers' Ins. Ass'n, 150 Tex. 215, 225-28, 239 S.W.2d 608, 614-15 (1951); Southern Underwriters v. Gallagher, 135 Tex. 41, 45, 136 S.W.2d 590, 592 (1940); Renner v. Liberty Mut. Ins. Co., 516 S.W.2d 239, 241 (Tex. Civ. App.- Waco 1974, no writ).
45. Renner v. Liberty Mut. Ins. Co., 516 S.W.2d 239, 241 (Tex. Civ. App.-Waco 1974, no
writ).
46. Id.; see Hale v. Texas Employers' Ins. Ass'n, 150 Tex. 215, 228, 239 S.W.2d 608, 616 (1951).
47. Renner v. Liberty Mut. Ins. Co., 516 S.W.2d 239,241 (Tex. Civ. App.-Waco 1974, no writ).
48. See note 37 supra. 49. Id.
tion. If the employer is not a subscriber under the Texas Act, there is nothing to prevent the claimant from asserting a non-subscriber cause of action against the employer, assuming Texas jurisdiction over the employer, whereby the employee can collect common law damages and the employer waives all common law defenses.5 1 The employee, of course, would still be required to prove negligence on the part of the employer.5 2 Nevertheless, a prudent employer who recruits Texans to work in foreign jurisdictions should purchase Texas compensation coverage or make provisions to be self-insured against potential non-subscriber claims.
In the area of procedure and venue, the legislature passed several amend-ments affecting compensation practice both at the Board and trial court level. The first change involved the pre-hearing conference which was first authorized by the legislature in 1969.53 In 1975 the legislature amended the statute to require the pre-hearing officer to prepare a report to the Board on cases not settled at the pre-hearing conference.5 4 In amending the statute, however, the legislature inadvertently omitted a portion of the second sen-tence of section 10(b) wherein the Board was authorized to direct "the parties; [sic] their attorneys or the duly authorized agents of the parties"5 5 to attend pre-hearing conferences. The amended section simply provided that the Board could direct "the parties," 56 and not their attorneys or agents, to appear for pre-hearing conferences.5 7 The legislature has now cured this defect by again amending section 10 and reinserting the original language.58
This word change may appear insignificant, but it must be remembered that Board members have the power to impose sanctions for contempt in the same manner and to the same extent as district judges.59 Thus an attorney,
an authorized agent, or the claimant or carrier representative who fails to appear for a pre-hearing conference without showing good cause may well be jailed or fined for contempt.
An even more important aspect of the language change in the pre-hearing statute concerned the Board's statutory power to bar persons guilty of unethical or fraudulent conduct from practicing before it.60 In its rules,61
the Board has decreed that failure to attend a pre-hearing conference without good cause will be considered unethical or fraudulent conduct.62 The rule
applies to attorneys or claimants' agents and carrier representatives.63 Thus,
51. TEX. REV. CIV. STAT. ANN. art. 8306, §§ I, 4 (Vernon 1967). 52. Id.
53. Id. art. 8307, § 10(b) (Vernon Supp. 1978). See generally Boykin, Presenting a Claim to the Texas Industrial Accident Board, 12 TRIAL LAW. F., July-Sept. 1977, at 6; Boykin, The Texas Industrial Accident Board: An Insider's Point of View, 9 TRIAL LAW. F., Jan-March 1975, at 5; Solomon, The Pre-hearing Conference in Workmen's Compensation, 9 TRIAL LAW. F., Oct.-Dec. 1974, at 11.
54. TEX. REV. CIv. STAT. ANN. art. 8307, § 10(b) (Vernon Supp. 1978). 55. 1969 Tex. Gen. Laws ch. 18, § 9, at 52.
56. 1975 Tex. Gen. Laws ch. 430, § i, at 1131.
57. This inadvertent amendment by deletion along with a second amendment by deletion was discussed in Sartwelle, Workmen's Compensation, Annual Survey of Texas Law, 29 Sw. L.J. 183, 215 n.17 (1975).
58. TEX. REV. CIv. STAT. ANN. art. 8307, § 10(b) (Vernon Supp. 1978).
59. Id. art. 8307, § 4 (Vernon 1967). 60. Id.
61. See Tex. Indus. Accident Bd., Emergency Rules, 2 Tex. Reg. 3214-24 (1977). 62. Id. rule 061.13.00.020(a)(l 1), (b)(1).
the reinsertion of the prior language in the pre-hearing statute provides the Board with the power to compel attendance at pre-hearing conferences and to discipline any person who chooses to ignore such orders.
Except for suits which involve extraterritorial injuries64 or occupational disease,65 venue of actions which seek to set aside Industrial Accident Board awards has been limited to the county where the injury occurred.66 The legislature has now broadened the venue provisions of the Act with respect to accidental injuries, but has not changed the provisions relating to occupa-tional disease.67 Effective August 29, 1977, a suit to set aside an award of the Industrial Accident Board in any case except extraterritorial injury or occu-pational disease may be brought: (1) in the county where the injury oc-curred; (2) in the county where the employee resided at the time the injury occurred; or (3) if the employee is deceased, in the county where the employee resided at the time of his death.68 Naturally, the expanded venue provision will engender numerous races to the courthouse, particularly when the employee is injured in a conservative county, but resides in a liberal county or vice versa. Although there is no such provision in the statute, it would seem logical to assume that the suit filed second in time would be subject to a plea in abatement or perhaps a motion to dismiss since all issues can be litigated and resolved in the first suit and since one venue provision is not dominant over the others. It is conceivable, however, that one award could be litigated in two different counties at the same time. For example, assume the Board enters an award denying compensation to an employee residing in Brazoria County, but allegedly injured in Harris County. The employee files suit to set aside the award in the county of his residence, Brazoria County. If an additional claimant, a hospital for exam-ple, asserts an independent claim for hospital expenses, the employee's suit does not vacate the award as to the hospital.69 The hospital, moreover, can pursue a claim independent of the employee70 by simultaneously filing suit to set aside the award as to its claim in Harris County, the county where the injury occurred.
The legislature also passed an amendment formalizing a procedure that has been used to settle compensation suits for years. Section 12, article 8307,71 requires Board approval of any compromise settlement between the parties. If suit is filed to set aside a Board award, the statute requires court approval of any compromise.7 2 Some courts have interpreted the statute to
64. TEX. REV. CIV. STAT. ANN. art. 8306, § 19 (Vernon Supp. 1978).
65. Id. art. 8307, § 5 (Vernon 1967). This venue provision was added in 1947 when occupational diseases became compensable. 1947 Tex. Gen. Laws ch. 113, § 11, at 180.
66. 1917 Tex. Gen. Laws ch. 103, § 5, at 283. The original Act simply provided that suit was
to be instituted in "some court of competent jurisdiction." 1913 Tex. Gen. Laws ch. 179, § 5, at 433.
67. TEX. REV. CIv. STAT. ANN. art. 8307, § 5 (Vernon Supp. 1978). See notes 37-52 supra and accompanying text.
68. TEX. REV. CIV. STAT. ANN. art. 8307, § 5 (Vernon Supp. 1978).
69. Latham v. Security Ins. Co., 491 S.W.2d 100 (Tex. 1972).
70. Maryland Cas. Co. v. Hendrick Memorial Hosp., 141 Tex. 23, 169 S.W.2d 969 (1943);
Harleysville Mut. Ins. Co. v. Frierson, 455 S.W.2d 370 (Tex. Civ. App.-Houston [14th Dist.]
1970, no writ).
71. TEX. REV. CIV. STAT. ANN. art. 8307, § 12 (Vernon 1967).
require personal appearances by the claimant and claimant's attorney in order to secure approval of a compromise settlement. Other district courts, however, have routinely accepted the claimant's affidavit in lieu of a per-sonal appearance. The legislature has now specifically approved the proce-dure of settling compensation suits by the use of affidavits,73 although the court retains the power to order an oral hearing. The affidavit must evidence the claimant's full understanding of the terms of the settlement and his agreement to settle the suit. Critics may say that an oral hearing offers the claimant more protection from overreaching by the carrier, or perhaps his own attorney, than does the affidavit procedure. This criticism, however, overlooks the fact that most oral hearings are simply rubber stamp affairs conducted with a minimum of interest. Moreover, the Industrial Accident Board for years has routinely approved compromise settlement agreements without personal appearances and has relied upon the adversary system to protect the claimant from any overreaching. The courts, too, should demon-strate faith in the adversary system. After all, once a court has reviewed the settlement terms and the claimant's affidavit, if there is any question about the propriety of the settlement, the parties can be ordered to appear for an oral hearing. In view of the legislative approval of the affidavit procedure, it is submitted that the courts should rarely require more.
There were also two amendments applicable to compensation insurance carriers. Article 830871 was amended to add section 20a75 which requires a carrier who cancels a policy prior to its normal expiration date to: (1) notify the subscriber by certified mail at least ten days prior to the date of cancella-tion; and (2) notify the Board by certified mail or in person on or before the date of cancellation. Failure to give the requisite notices extends the policy coverage until such notice is given. The Board had sought the power to require such notice for years. As far back as 1953, the Board rules have contained a provision that all policies were presumed to be in effect until a cancellation notice was received by the Board.76 Because there was no statutory authority to support the rules, however, the courts held them insufficient to bind the carriers.77 Effective September 1, 1977, with or without a Board rule, cancellations of workers' compensation policies will be ineffective until both the subscriber and the Board are notified.
The second amendment that affected compensation carriers increased the general revenue contributions required by section 28 of article 8306.78 The prior statute79 created a special workmen's compensation fund to be used by
73. TEX. REV. CIv. STAT. ANN. art. 8307, § 12a (Vernon Supp. 1978). At the same time the legislature approved settlements by affidavit, however, the Industrial Accident Board enacted a new rule requiring the claimant to personally appear before a Board representative who can recommend the approval of a compromise settlement agreement. The personal appearance requirement, however, can be waived by the Board representative upon a showing of good cause. Tex. Indus. Accident Bd., Emergency Rule 061.08.00.230, 2 Tex. Reg. 3221 (1977).
74. TEX. REV. CIv. STAT. ANN. art. 8308 (Vernon 1967 & Supp. 1978). 75. Id. art. 8308, § 20a (Vernon Supp. 1978).
76. Tex. Indus. Accident Bd., Rule 2.03 (1953).
77. See, e.g., Johnson v. Firemen's Ins. Co., 398 S.W.2d 318 (Tex. Civ. App.-Eastland 1965, no writ); Burton v. I.C.T. Ins. Co., 304 S.W.2d 292 (Tex. Civ. App.-Texarkana 1957, no writ).
78. TEX. REV. CIv. STAT. ANN. art. 8306, § 28 (Vernon Supp. 1978).
the Board to defray the cost of administering the Act. The tax was one-fourth of one per cent of the gross premiums collected by each carrier writing compensation insurance and a like amount of tax on self-insurers based on total annual medical and indemnity costs. The amendment abol-ished the workmen's compensation fund, increased the tax to 45/100 of one per cent and provided that the tax be paid into the general revenue fund. The legislature also eliminated the $7.50 filing fee which was collected from employers when they notified the Board that they had become subscribers under the Act."0 The penalty for failure to report coverage, however, was not changed.8
A number of amendments were passed which substantially affect work-ers' compensation as it applies to employees of the state and its various institutions, agencies, and political subdivisions. The self-insured compen-sation program for state employees was amended to exclude several groups from the employee definition.82
Specifically excluded from coverage were:
(1) persons performing personal services for the state as independent
contractors or volunteers; (2) members of the state military forces; (3) persons who, at the time of injury, were performing services for state or federal political subdivisions or who were controlled by an agency other than the State of Texas; (4) employees of the Department of Highways and Public Transportation covered by article 6674s ;83 and (5) employees of the
University of Texas and Texas A & M University system8
The legislature also provided a method for collecting unpaid compensa-tion judgments from the state and its political subdivisions. If the state or any of its departments, divisions, or political subdivisions fail to comply with a judgment, and if the claimant successfully secures mandamus compelling compliance, he is also entitled to a twelve per cent penalty on the amount of the judgment and reasonable attorneys' fees for prosecuting the mandamus. 5 This article applies to the State Employees' Act,86 Political Subdivision Act,7 and Texas A & M employees,8 University of Texas
employees,89 and highway department employees.90 This amendment was
80. TEX. REV. CIv. STAT. ANN. art. 8308, § 18a (Vernon Supp. 1978). 81. Id.
82. Id. art. 8309g.
83. Id. art. 6674s (Vernon 1977) (individual compensation program for department employ-ees).
84. Id. arts. 8309b, 8309d (Vernon 1967 & Supp. 1978). Strangely enough even though Texas A & M University, in 1947, was allowed to provide its employees with workers' compensation coverage, 1947 Tex. Gen. Laws ch. 229, § 1, at 417, and in 1951, the University of Texas was allowed to do the same, 1951 Tex. Gen. Laws ch. 310, § I, at 522, Texas Tech University's individual workers' compensation program, similar in all respects to those estab-lished for A & M and Texas, 1957 Tex. Gen. Laws ch. 252, § 1, at 536, was aboestab-lished by the 1977 legislature. All Texas Tech employees are now entitled to participate in the workmen's compensation program for state employees provided in art. 8309g. TEx. REV. CIv. STAT. ANN. art. 8309g-1 (Vernon Supp. 1978). The employees covered include all employees of Texas Tech University, Pan Tech Farm, Texas Tech University School of Medicine and all other agencies under the direction and control of the Texas Tech University Board of Regents. Id. Presumably, these amendments also include employees of Texas Tech University Law School.
85. TEX. REV. CIV. STAT. ANN. art. 8309i (Vernon Supp. 1978).
86. Id. art. 8309g. 87. Id. art. 8309h.
88. Id. art. 8309b (Vernon 1967 & Supp. 1978). 89. Id. art. 8309d.
also made applicable to Texas Tech University employees, but as noted,9' Tech employees now come under the State Employees' Compensation Pro-gram.92
The legislature also amended A & M's program,93 limiting the University's special compensation waiver privilege. Originally, A & M,94 Texas,95 and Texas Tech' were given the right to have employees and prospective em-ployees undergo physical examinations to determine if they were "physical-ly fit to be classified" as workmen.97 Moreover, each school could require a worker who failed the physical examination to execute an unlimited waiver of his rights to compensation!98 The legislature amended sections 13, 14, and
1599 of the A & M program to provide that the University can secure and retain in its permanent records a complete medical history of a prospective employee'0° and employ individuals with pre-existing physical conditions. Most important, the university's special waiver of compensation privilege was limited to apply only to an injury or death attributable to a specified condition identified in the waiver.0 1 Strangely enough, the University of Texas statute, which is virtually a carbon copy of the A & M statute, was not amended. Texas still retains the unlimited waiver right.
In 1969 the legislature established a work furlough program for prisoners confined to the Texas Department of Corrections.10 2 Section 9 of the arti-cle1 3 provided that prisoners employed pursuant to the Act were not entitled to workers' compensation coverage if injured on the job. Section 9 was amended, however, and now specifically provides that a prisoner is entitled to collect compensation benefits for on-the-job injuries.' °4
The legislature also restricted coverage related to political subdivisions.05 Jurors and individuals appointed to conduct elections were excluded from the employee definition unless specifically declared to be employees by a majority vote of the governing body of the political subdivision involved.'°6 At the same time political subdivisions were given the discretion to provide coverage for elected officials.
There were two additional amendments to the compensation program covering employees of political subdivisions.07 Section 5(a)1 08 was amended to provide that under optional salary continuation plans for municipalities,' °9
91. See note 84 supra.
92. TEX. REV. CIv. STAT. ANN. art. 8309g (Vernon Supp. 1978). 93. Id. art. 8309b (Vernon 1967 & Supp. 1978).
94. 1947 Tex. Gen. Laws ch. 229, at 417. 95. 1951 Tex. Gen. Laws ch. 310, at 522. 96. 1957 Tex. Gen. Laws ch. 252, at 536.
97. 1947 Tex. Gen. Laws ch. 229, § 13, at 421; 1951 Tex. Gen. Laws ch. 310, § 13, at 526-27; 1957 Tex. Gen. Laws ch. 252, § 13, at 540-41.
98. 1947 Tex. Gen. Laws ch. 229, § 15, at 422; 1951 Tex. Gen. Laws ch. 310, § 15, at 527; 1957 Tex. Gen. Laws ch. 252, § 15, at 541.
99. TEX. REV. CIv. STAT. ANN. art. 8309b, §§ 13, 14, 15 (Vernon Supp. 1978).
100. Id. § 13.
101. Id. § 15.
102. Id. art. 6166x-3 (Vernon 1970 & Supp. 1978). 103. 1969 Tex. Gen. Laws ch. 493, § 9, at 1601.
104. TEX. REV. CiV. STAT. ANN. art. 6166x-3, § 9 (Vernon Supp. 1978). 105. Id. art. 8309h.
106. Id. § 1.
107. Id. art. 8309h.
108. Id. § 5.
when an employee's salary is continued, but offset by the payment of workers' compensation, both the employer and employee shall pay into the employee's pension fund the amount of money by which the wage was offset. 0 The section further provides that the employee's pension benefits will not be reduced because of the on-the-job injury or the compensation benefits received."' Section 5(b) provides that when benefits are offset the employer may not withhold the offset portion of the employee's wages until the compensation benefits are received."'
A new article"3 allows a municipality a right of subrogation when it has made salary continuation payments to a workman injured by the tortious conduct of a third person, unless that third person is an employee of the same municipality. The fact that the employee has a third party action is not a ground for denying the employee benefits under the salary continuation program. "4 The last amendment dealing with political subdivisions is the
amendment of article 2028.115 This article now provides that, in a suit against a school district, citation may be served on the school board president or the
school superintendent.
Perhaps the most controversial workers' compensation amendment was Senate Bill 1275,116 which was passed in the waning hours of the 1977 legislative session. This bill amended the Second Injury Fund provisions,"7 the minimum-maximum compensation provisions,"' and added two new sections to article 8307"9 dealing with confidentiality of records and fraudu-lent conduct, and applying a portion of the Administrative Procedure Act to the Industrial Accident Board.
The Administrative Procedure and Texas Register Act 20 was enacted in 1975 and became effective January 1, 1976.12 1 Although the Act's purpose was to provide for public participation in the rule making process of various state agencies and to ensure adequate and proper public notice of proposed rules and agency actions,122 the Industrial Accident Board was specifically exempted from the Act's provisions. 23 Now, however, new section 4b 24 provides that sections 1 through 12 of the Administrative Procedure and Texas Register Act'25 specifically apply to the Board. The Board is exempt from the provisions of sections 4(a)(3) and 4(b),126 which provide for public access to, and indexing of, an agency's final orders, decisions and opinions.
110. Id. art. 8309h, § 5(a) (Vernon Supp. 1978).
111. Id.
112. Id. § 5(b). 113. Id. art. 999f.
114. Id.
115. Id. art. 2028.
116. 1977 Tex. Gen. Laws ch. 801, at 2004-09.
117. TEX. REV. CIV. STAT. ANN. art. 8306, §§ 12c, 12c-1 (Vernon Supp. 1978). 118. Id. § 29(c). See note 25 supra and accompanying text.
119. TEX. REV. CiV. STAT. ANN. art. 8307, §§ 4b, 9a (Vernon Supp. 1978). 120. Id. art. 6252-13a, §§ 1-23.
121. Id. § 23. See also 1975 Tex. Gen. Laws ch. 61, 99 1-23, at 136-48.
122. TEX. REV. CIV. STAT. ANN. art. 6252-13a, § I (Vernon Supp. 1978). 123. Id. § 3(1).
124. Id. art. 8307, § 4b.
The Board is also exempt. from the provisions of sections 13 through 20127 which basically provide for the procedure, rules and regulations governing a
contested agency hearing.
The portion of the Act applicable to the Industrial Accident Board,28 deals
with the adoption of agency rules and requires such rules to be published in the Texas Register. In compliance with the Act the Board promulgated its emergency rules, effective August 29, 1977.129 These new Board rules delete a number of rules which were simply restatements of the statute, adopt a few new rules, and substantially change some existing rules.130 The new
rules represent an attempt to streamline the Board's rules.'31
The Texas Open Records Act32
created a confidentiality problem for the
127. Id. §§ 13-20.
128. Id. §§ 1-12.
129. Tex. Indus. Accident Bd., Emergency Rules 061.01.00.010-061.14.00.010, 2 Tex. Reg. 3214-24 (1977).
130. For example, rule 061.06.00.020 (previously rule 6.020) makes the procedure for resolv-ing disputes as to the representation of a claimant by two or more attorneys more definite. Rule 061.07.00.030 (previously rules 7.030-7.060) provides specific procedures to be followed when the Board is attempting to certify a carrier to the State Board of Insurance for wrongfully failing to pay or terminating compensation. This procedure has been needed for a number of years. Another significant change was in the Board's definition of unethical or fraudulent conduct by carrier representatives. Rule 061.13.00.020, § 9 was amended to include as unethical or fraudu-lent conduct, conduct "allowing an employer to dictate the methods by which and the terms on which a claim is handled and settled." The rule further states that the carrier and employer may freely discuss the claim and its evaluation and that the employer may participate in the pre-hearing conference.
131. In amending its rules, the Board did away with one particularly objectionable rule. Tex. Indus. Accident Bd., Rule 8.140 (1974), although ambiguous, provided that no compromise settlement agreement will be approved by the Board for an amount less than the maximum weekly compensation rate in effect at the time of the injury. Obviously the rule contravened the legislative enactment regarding the computation of the compensation rate as it related to the claimant's wage rate. TEX. REv. CIv. STAT. ANN. art. 8306, §§ 10, 11, 12 (Vernon Supp. 1978);
id. art. 8309, § I (Vernon 1967). The Board's new rule governing approval of compromise
settlement agreements deleted the offending language. Tex. Indus. Accident Bd., Emergency Rules 061.08.00.010-061.08.00.230, 2 Tex. Reg. 3219-21 (1977). For criticism of other Board rules and practices see Sartwelle, supra note 6, at 215-18; Sartwelle, supra note 7, at 261-64, 265-70.
One particular requirement in the Board rules is beyond the scope of the Board's power. Tex. Indus. Accident Bd., Emergency Rule 061.05.00.170(c), 2 Tex. Reg. 3216 (1977). This rule deals with directed medical examinations pursuant to TEX. REV. CIv. STAT. ANN. art. 8307, § 4 (Vernon 1967). Section 4 provides that at the Board's (Court's) discretion, the carrier may have the claimant examined by a physician of its choice. See, e.g., Wallace v. Hartford Accident & Indem. Co., 148 Tex. 503, 226 S.W.2d 612 (1950); Universal Underwriters Ins. Co. v. Potter, 411 S.W.2d 400 (Tex. Civ. App.-Beaumont 1966, writ ref'd n.r.e.); Jones v. Commercial Union Assurance Co., Ltd., 405 S.W.2d 207 (Tex. Civ. App.-Beaumont 1965, no writ); Boston Ins. Co. v. Palmer, 342 S.W.2d 804 (Tex. Civ. App.-Eastland 1961, writ ref'd n.r.e.). The Board's rule provides, however, as a condition precedent to granting a carrier's request, that the carrier must make a statement that it has "insurance coverage" of the claim under the Texas Workers' Compensation Act and this statement is an "admission of coverage by the named insurer of the named employer." Tex. Indus. Accident Bd., Emergency Rule 061.05.00.170(c), 2 Tex. Reg. 3216 (1977).
The actual wording of section (c) is innocuous even though a review of the statute and cases reveal absolutely no authority for such an "admission." Due to the ambiguous language, however, this portion of the rule could be and has been interpreted by an over-zealous pre-hearing examiner as requiring an admission of liability for the claimant's alleged accident before a directed medical examination will be granted. Clearly, this is not a statutory requirement. Unfortunately, carrier representatives may be unaware of the statutory wording and simply accept the denial without question. To avoid confusion and ambiguity, the requirement should be stricken. It contributes no relevant information to assist the Board in determining whether to accept or reject the request, and it has no support in the statute or case law.
Industrial Accident Board when a non-profit foundation sought to tie into
the Board's computer system and extract information on every claim ever filed by a Texas employee. Despite strong opposition by the Board, the supreme court upheld the public's right to gain access to government
records, including those of the Board.133 In response to the court's decision, the legislature added section 9a to article 8307134 providing a degree of confidentiality to Board files. The section declares that information in a workers' claim file is confidential and may not be disclosed except in specifically designated instances.' In essence the legislature adopted the wording of the Board's prior rule136 which the supreme court rejected as justification for withholding information from the public under the Open Records Act. 3 7
One exception to the limited confidentiality established by section 9a(a) and (b) is section (c), 38 which relates to the controversial fraudulent
claim-133. Industrial Foundation v. Texas Indus. Accident Bd., 540 S.W.2d 668 (Tex. 1976), cert.
denied, 430 U.S. 931 (1977).
134. TEX. REV. CIV. STAT. ANN. art. 8307, § 9a (Vernon Supp. 1978).
135. Id.
136. Tex. Indus. Accident Bd., Rule 9.040 (1974). The rule provided:
As a prerequisite for approval of a request for a record check or for the furnishing of information on a claimant, there must be a workmen's compensation claim for the named claimant open or pending before this Board or on appeal to a court of competent jurisdiction from the Board at the time the record search request or request for information is presented to this Board. . . .The Board will furnish the requested information or a record check only to the following: (1) the claimant; (2) the attorney for the claimant; (3) the carrier; (4) the employer at the time of the current injury; (5) third-party litigants.
TEX. REV. CIv. STAT. ANN. art. 8307, § 9a(b) (Vernon Supp. 1978) provides:
If there is a workers' compensation claim for the named claimant open or pending before the Industrial Accident Board or on appeal to a court of competent jurisdiction from the Board or which is the subject matter of a subsequent suit where the carrier is subrogated to the rights of the named claimant at the time a record search or request for information is presented to the Board, the informa-tion shall be furnished as provided in this secinforma-tion. The first, middle, and last name of the claimant, age and social security number, and, if possible, dates of injury and the names of prior employers must be given in the request for information by the requesting party. The Board will furnish the requested information or a record check only to the following:
(1) the claimant;
(2) the attorney for the claimant; (3) the carrier;
(4) the employer at the time of the current injury;
(5) third-party litigants; or (6) the State Board of Insurance.
A third-party litigant in a suit arising out of an occurrence with respect to which a workers' compensation claim was filed is entitled to the information without regard to whether or not the compensation claim is still pending.
137. Industrial Foundation v. Texas Indus. Accident Bd., 540 S.W.2d 668 (Tex. 1976), cert.
denied, 430 U.S. 931 (1977). TEX. REV. CIv. STAT. ANN. art. 8307, § 9a(n) (Vernon Supp. 1978), in a very limited recognition of the purpose of the Open Records Act, provides that any person may obtain from the Board all information in any record or file established after September 1, 1971, in statistical form, as long as the name or identity of the claimant is not disclosed except as otherwise provided in the statute.
ant portion of the statute.' 39 Actually, the statute relates not only to fraudu-lent claimants but to any person connected with the compensation system. The attorney general is authorized to investigate and prosecute any allega-tion of fraud on the part of any person, including attorneys, whether the allegations emanate from the Board or through the attorney general's own efforts. The statute also sets out a detailed prosecution procedure to be followed by the Board and the attorney general and provides the Board with broad subpoena power.
A controversial section of the fraudulent claimant statute is section 9a(e)(2).14 It provides that when an employee makes a fifth claim for compensation within any five year period, the Board must automatically notify the attorney general who must investigate to determine if fraud was involved in any of the claims. If an employee is adjudicated to be a fraudu-lent claimant, section 9a(c)'4' becomes operational. All Board information collected on that individual becomes nonconfidential and may be furnished to any person requesting it. Workers' compensation has long needed this comprehensive investigatory scheme. While it no doubt will be exceedingly difficult to prove actual fraud in individual cases, the recognition of the problem and the adoption of specific procedures and penalities, set forth in plain language, should be an effective deterrent to fraudulent claims. Even if this comprehensive enactment results in ferreting out only one dishonest person, it will have served its purpose for the good of all concerned with the compensation system.
The last and most significant amendment to the Compensation Act in 1977 was the return of the prior injury contribution defense of section 12c.'42 Long thought dead and buried, 12c has arisen like a Phoenix from the ashes, as a result of the legislature's compensation amendments. Prior to 1971 12c allowed the insurer the defense of percentage contribution of prior injuries to a present incapacity. 43 The statute provided that if the employee had suffered a previous injury which resulted in incapacity and which contribut-ed to the subsequent incapacity, then the association was liable only for the incapacity caused by the subsequent injury, as if there had been no prior injury.'" In 1971, however, the legislature abolished the defense by provid-ing "the association shall be liable for all compensation provided by this
attorneys overstate the results of any specific injury in an attempt to extend the injury to the body generally. Thus, if the Board has classified the injury on the basis of the employee's report of injury and claim for compensation form, then most, if not all claims should be disclosed.
139. Id. §§ 9a(e)(1)-(e)(3). 140. Id. § 9a(e)(2). 141. Id. § 9a(c).
142. TEX. REV. CIV. STAT. ANN. art. 8306, § 12c (Vernon Supp. 1978).
143. See, e.g., St. Paul Fire & Marine Co. v. Murphree, 163 Tex. 534,357 S.W.2d 744 (1962); Gilmore v. Lumbermen's Reciprocal Ass'n, 292 S.W. 204 (Tex. Comm'n App. 1927, jdgmt adopted); see Altman, The Status of "Other Compensable Injuries" Under the Texas
Work-men's Compensation Act, 10 TRIAL LAW. F., Oct.-Dec. 1975, at 18.
144. 1947 Tex. Gen. Laws ch. 349, § 1, at 690-91. The statute, including the reference to the Second Injury Fund created in 1947 provided:
act.' 45 During the intervening years, the courts unanimously held that amended section 12c no longer allowed proof of a prior compensable injury nor reduced the recovery of a workman because of such prior injury. 146 The economic impact of this simple change in wording is incalculable. In ess-ence, the 1971 amendment could be labeled "the workers' early retirement program." Since prior injuries and the resulting incapacity were inadmiss-ible, it was theoretically possible for a workman to be injured on the same job five days in a row and collect five total and permanent awards. The 1977 amendment of section 12c147
readopts the section's precise language as it existed prior to 1971.48 In addition the legislature liberalized the employee claim procedure against the Second Injury Fund)49
Since the legislature has returned 12c and the Second Injury Fund to its pre-1971 status, the question arises whether the body of pre-1971 case law interpreting these sections is still viable. The answer seems to be in the affirmative. This is unfortunate because the courts in those cases both misinterpreted the legislative language and ignored the legislative purpose. The result has been a confusing mass of cases decided on a seemingly random basis. No rationale can be discovered in any of these opinions for the unnecessary complication of what could and should be a relatively straightforward concept.
In order to fully comprehend the source of this unfortunate deviation from section 12c's original purpose and to understand the section's current interpretation, it is necessary to trace the history of the section. Some of the confusion surrounding the 12c contribution doctrine results from the doc-trinal entanglement of 12c with the Second Injury Fund adopted in 1947. Thus, it is necessary to review 12c's complete history both prior and subse-quent to the Second Injury Fund amendment.
The original Texas compensation law'50 was enacted in 1913 but contained no provision corresponding to 12c.15' In 1917152 section 12c was adopted in
subsequent injury would have entitled the injured employee had there been no previous injury; provided that there shall be created a fund known as the 'Second-Injury Fund' hereinafter described, from which an employee who has suffered a subsequent injury shall be compensated for the combined incapacities resulting from both injuries.
145. 1971 Tex. Gen. Laws ch. 316, § 1, at 1257 (emphasis added).
146. Second Injury Fund v. American Motorists Ins. Co., 541 S.W.2d 514 (Tex. Civ.
App.-Eastland 1976, writ ref'd n.r.e.); Houston Gen. Ins. Co. v. Teague, 531 S.W.2d 457 (Tex. Civ. App.-Waco 1975, writ ref'd n.r.e.); Texas Employers' Ins. Ass'n v. Haunschild, 527 S.W.2d 270 (Tex. Civ. App.-Amarillo 1975, writ ref'd n.r.e.); Texas Employers' Ins. Ass'n v. Cres-well, 511 S.W.2d 68 (Tex. Civ. App.-Eastland 1974, writ ref'd n.r.e.).
147. TEX. REV. CIv. STAT. ANN. art. 8306, § 12c (Vernon Supp. 1978). 148. See note 144 supra.
149. TEX. REV. Civ. STAT. ANN. art. 8306, § 12c (Vernon Supp. 1978). Section 12c is worded exactly as in 1947 with the exception of the last sentence which is new. See note 144 supra. The last sentence states: "Provided further, however, that notice of injury to the employer and filing of a claim with the Industrial Accident Board as required by law shall also be deemed and considered notice to and filing of a claim against the 'Second Injury Fund.' " Section 12c-1
was also amended to its exact pre-1971 language, TEX. REV. CIV. STAT. ANN. art. 8306, § 12c-1 (Vernon Supp. 1978), which was originally adopted in 1947 when the Second Injury Fund was created. 1947 Tex. Gen. Laws ch. 349, § 1, at 691.
150. 1913 Tex. Gen. Laws ch. 179, at 429.
151. Id. at 429-38.
the exact wording as today, without the Second Injury Fund reference.' 53 Until 1927 there were no cases construing section 12c. In that year,
however, the commission of appeals decided Gilmore v. Lumbermen's
Re-ciprocal Association.' Gilmore lost the sight of one eye in a childhood accident. In the course and scope of his employment for Lumbermen's
insured, he received a second injury and lost the sight of his other eye. The Board awarded compensation for the loss of one eye, that is sixty per cent of the average weekly wage for 100 weeks. The employee appealed contending
he was entitled to statutory total and permanent benefits for the loss of sight of both eyes. 155 The district court awarded total and permanent benefits, but
the court of civil appeals reversed.
The commission of appeals, faced with the task of determining 12c's
purpose, delved into the history of compensation law and in an extraordinar-ily lucid opinion set forth the purposes behind the legislature's enactment of 12c:
[W]e have reached the conclusion that the Texas statute under
discus-sion and similar statutes in other states were enacted for the benefit of persons as a class who enter employment with permanent partial disa-bility rather than to their detriment. If it were not for such legislation, then all maimed and crippled laborers would be deprived of employ-ment in all industrial plants where workmen's compensation insurance
was carried, if those plants were conducted on strictly business princi-ples.
I .If it may be said that one of this class, who becomes totally and permanently disabled upon receiving a second injury, is not fairly treated unless he receives compensation for total permanent disability, then it is better that the few who happen to [sic] second accidents should so suffer, rather than the whole class should suffer by being denied employment.156
153. William Cameron & Co., Inc. v. Gamble, 216 S.W. 459 (Tex. Civ. App.-Austin 1919,
no writ).
154. 292 S.W. 204 (Tex. Comm'n App. 1927, jdgmt adopted).
155. 1917 Tex. Gen. Laws ch. 103, § Ila, at 275. The injury occurred in April, 1920. Lumbermen's Reciprocal Ass'n v. Gilmore, 258 S.W. 268 (Tex. Civ. App.-Texarkana 1924),
aff'd, 292 S.W. 204 (Tex. Comm'n App. 1927, jdgmt adopted).
156. Id. at 206-07. The various courts thoughout the country arrived at two basic solutions to the dilemma presented by the Gilmore case. One was to hold the employer liable for all compensation (non-apportionment rule), the other to charge the employer only for the compen-sation due for the second injury (apportionment rule). The employment of handicapped work-ers under either rule, however, was a source of concern to all involved in the compensation system as is indicated by the great debate over the operation of various Second Injury Funds. See, e.g., Proposed Longshoremen's and Habor Workers' Compensation Act: Hearings on S. 3170 Before the Comm. on the Judiciary of the House of Representatives, 69th Cong., I st Sess.
(1926); U.S. BUREAU OF LABOR STATISTICS, DEP'T OF LABOR 536 (1931); U.S. BUREAU OF LABOR STATISTICS, DEP'T OF LABOR 577 (1933); Scurlock, Enactment of a "State Fund" Amendment, 14 OKLA. B.A.J. 1331 (1943); 44 MICH. L. REV. 1161 (1946).
Professor Larson comments upon the problem and the resulting solution, 2 A. LARSON, THE LAW OF WORKMEN'S COMPENSATION § 59.31, at 10-285-88 (1976) (footnotes omitted):
Thus Gilmore only allowed an incremental recovery, that is the employee was entitled to recover compensation for the incapacity resulting from the subsequent injury alone and not for the final incapacity attributable to both the subsequent injury and the preexisting disability.
From the time of the Gilmore opinion in 1927 until 1951, with two undis-tinguished exceptions, neither the supreme court nor the commission of appeals considered 12c's implementation. Unfortunately, the interpretation and application of the statute was left without guidance to the courts of civil appeals; this resulted in confusing, random, and sometimes undecipherable opinions. The next opinion after Gilmore was Texas Employers'Insurance
Association v. Heuer.'57 The carrier contended, pursuant to 12c, that it was entitled to "mitigation"' 158 of the compensation owed in light of the claim-ant's prior injury. The court noted, however, that section 12c was inapplica-ble because the injuries involved in the suit were to the left hand, arm, and shoulder, whereas the prior injury was to the right arm. Thus, the court affirmed a total permanent incapacity judgment on the ground that the former injury was not a contributing factor to the present incapacity.
Several months later the Amarillo court reached the same result in a somewhat offhand manner.159 The court held that a prior arthritic condition was not an injury as contemplated in 12c. Alternatively, the court held that 12c was inapplicable because there was no evidence that the claimant suffered from a prior disability which contributed to any subsequent in-capacity. The commission of appeals simply adopted the lower court's holding that a prior disease condition was not an "injury" within the mean-ing of 12c.160 Two more court of civil appeals opinions consistent with
Gilmore were rendered in 1929.161 It was readily apparent from the opinions
that, as indicated in Gilmore, the 12c limitation on compensation recovery was dependent upon the showing of a causal connection, that is, cause in fact, between the previous injury's effects and the subsequent incapacity existing after the second compensable injury.
of $5,000 for a man with two good eyes but $26,000 for a man with only one, the compensation insurance premium on the latter would naturally be markedly greater. It has been said, for example, that within the 30 days'following the announcement of the nonapportionment rule in Nease v. Hughes Stone Company [114 Okla. 170, 244 P. 778 (1925)], between seven and eight thousand one-eyed, one-legged, one-armed, and one-handed men were displaced in Oklahoma.
157. 10 S.W.2d 756 (Tex. Civ. App.-Beaumount, writ dism'd), second motion for rehearing denied, II S.W.2d 566 (1928).
158. Id. at 759.
159. Texas Employers' Ins. Ass'n v. Parr, 16 S.W.2d 354 (Tex. Civ. App.-Amarillo 1929),
aff'd, 30 S.W.2d 305 (Tex. Comm'n App. 1930, jdgmt adopted).
160. Texas Employers' Ins. Ass'n v. Parr, 30 S.W.2d 305 (Tex. Comm'n App. 1930, jdgmt adopted).
In the 1930 case of Texas Employers' Insurance Association v. Clark162 confusion over the purpose and application of 12c first appeared. Clark suffered two injuries while working for the same employer on September 1, 1926 and May 26, 1927. He did not miss time from work until July 6, 1927 when, as a result of the injuries, he became paralyzed. The evidence indi-cated neither blow alone was sufficient to produce paralysis, but the combined effects had produced the subsequent incapacity.
The 12c question arose when the trial court submitted an issue inquiring whether either or both injuries resulted in total incapacity. For reasons that are unclear the carrier objected to the issue and relied on section 12c. After noting that the combination of the two "licks"' 63 produced the paralysis, the court responded rather unintelligibly:
Considering the provision [12c] in the light of the purposes of the Workmen's Compensation Law, we think it clear that, where the word 'injury' is used in the quoted section, the Legislature clearly intended compensative injury, or injury for which compensation is provided under the terms of the law. No other injury was the subject of the legislation. The provision, we think, has application to such cases as where two separate injuries are received at different times, the first of which within itself entitles the employee to compensation and not to a case where neither the previous nor subsequent injury was alone compensative. '64
The court cited no authority whatsoever to support its statement on the purpose of 12c. Remarkably, neither Gilmore, nor any other cases or legisla-tive history were discussed. The court's only motivation was to affirm the judgment. Yet, in its haste, the court ignored the most obvious reason why 12c was inapplicable, that is there was no evidence of any prior incapacity resulting from the first injury. The plain words of the statute require the first injury to produce an incapacity to which is then added a second injury and a greater incapacity contributed to by both injuries. The evidence in Clark was undisputed that the first injury did not cause an incapacity and that the claimant continued to work his regular job until paralyzed several months after the second injury. Moreover, the court's definition of "injury" was unwarranted; the term injury was defined in the Act to mean damage or harm to the physical structure of the body. 65 The Act made the definition of injury applicable to all sections of the compensation law.166 Without doubt the Clark court was wrong in its construction of 12c.
For several years Clark was ignored. The courts continued to hold that the proper test in a 12c case was a "causal connection between the two injuries."167 In 1933, one of the clearest opinions regarding 12c's application was handed down by the same court and same judge that had decided Clark. In Hartford Accident & Indemnity Co. v. Leigh I" the jury found the
claim-162. 23 S.W.2d 405 (Tex. Civ. App.-Eastland 1930, writ dism'd). 163. Id. at 409.
164. Id.
165. 1917 Tex. Gen. Laws ch. 103, § 1, at 291. 166. Id.
167. Texas Employers' Ins. Ass'n v. Pugh, 57 S.W.2d 248 (Tex. Civ. App.-Dallas 1933, writ dism'd).
